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Gazprom CEO Alexei Miller and Rosneft CEO Igor Sechin reported on the project’s progress to the President.

The Vostochno-Messoyakha oilfield is operated by Messoyakhaneftegaz, a joint venture between Gazprom Neft and Rosneft. The project was implemented in complete isolation from transport and other infrastructure. Oil from the field will first enter the Zapolyarye-Purpe mainline pipe system through a 98-kilometre long pipeline.

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President of Russia Vladimir Putin: Good afternoon, colleagues.

Today we are launching commercial production at the Vostochno-Messoyakha oilfield in the Yamal-Nenets Autonomous Area. This is the northernmost major onshore oilfield in Russia. It is a result of the hard, I would say, massive effort of many teams. The work began decades ago after the geological survey was completed.

The discovered oil-bearing areas are located in a region with extreme weather conditions. Extracting oil from Messoyakha and its transportation required thousands of experts, the most complex technology and huge investment. The project involved our leading energy companies, Rosneft and Gazprom.

Let me note that the economic development of the Arctic territories and the launch of new large deposits were possible thanks to large infrastructure projects. As you may remember, on April 22, 2010, the Government signed an order to design and begin construction of the Zapolyarye-Purpe main oil pipeline.

This pipeline and the adjacent Eastern Siberia-Pacific Ocean pipeline are the main pathways for the oil to be delivered to the domestic and global markets. It will serve the development of Russian enterprises and contribute to the stability of the global energy market.

I would like to add that after the Vostochno-Messoyakha oilfield, we plan to develop the Zapadno-Messoyakha oilfield, which means there is a lot of very ambitious work ahead that our country needs.

Congratulations on today’s milestone. I wish you success in the future stages of the project. Good luck.

Gazprom CEO Alexei Miller: Mr President, the Messoyakha oilfield is located on the Gydan Peninsula in the Arctic, 350 kilometres north of Novy Urengoi. Eighty-five billion rubles was invested in its development. The operation of the oilfield until 2040 will bring a total of one trillion rubles in taxes to the budgets at all levels.

Viewing a video about the oilfield.

Mr President, we have Rosneft CEO Igor Sechin and Gazprom Neft Chairman Alexander Dyukov on the line.

Vladimir Putin: Mr Sechin, please.

Rosneft CEO Igor Sechin: Mr President, the first commercial oil from the Vostochno-Messoyakha oilfield will enter the Russian main oil pipelines today. It is a great honour for the teams of Rosneft and Gazprom Neft to launch this oilfield into commercial production under your supervision.

The main deposits of this oilfield are located in complex geologic structures, and each of them has its specifics. Therefore, we used the most advanced technology to model and carry out the drilling. Fifty-one oil wells were built, including technology-intensive horizontal directional wells with side tracks that increased the well rate by 40 percent.

Facilities have been built for oil treatment and shipping in the absence of an industrial and transport infrastructure. Our company, in particular, provided access to the latest technologies employed in such major Arctic projects as the Vankor oil and gas field.

Mr President, I would like to report that we are finishing the development of the Vankor cluster in general, and we hope that next month we will report the launch of the Suzunskoye field located 150 km from Messoyakha at the same latitude. This year, Suzun will give us 1,200,000 tonnes of oil. It will eventually produce 4.5 million tonnes per year. The next stage is the Tagulskoye field in Eastern Siberia.

With high competition in the global hydrocarbon market, it is essential for the Russian oil industry to maintain production at the same level and launch more new fields. Our industry needs tax incentives in order to remain competitive on the global scene. As Mr Miller said, we invested 250 billion rubles in this field alone. We believe the tax incentives that are being developed must use a versatile approach based on oil reservoir properties, chemical and physical properties of the crude oil, the water cut of deposits and the available infrastructure.

Mr President, the success of our large-scale projects is, without doubt, a result of your support for and attention to our companies and projects. I would like to thank you on behalf of the Rosneft and Gazprom Neft teams for your attention, involvement and support.

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Vladimir Putin: Colleagues, congratulations on this important milestone in the Russian energy industry. Congratulations to the construction workers, experts, engineers and managers. I wish you all success.

Thank you.